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Recently, I spoke with a CIO who told me that he was moving into a new role. At our SAP for Utilities conference at Huntington Beach, he unveiled his new title: IT/OT Director. He is one of the pioneers, but he is certainly not going to be the last; across the world, dedicated IT/OT convergence roles are being created.

These roles serve as recognition of the importance of making sure that information technology and operational technology are working together. And it is important. As grids and utility networks get smarter, the benefits – and risks – become more apparent.

Smart grids need smart responses

We talk about “smart grids” largely in terms of electricity supply, but similar technologies are accelerating the pace of change in all utilities – technologies that allow measurements at multiple points in the supply network to be reported in real time to the control room, rather than being recorded at intervals or even only when a crew is sent in response to a reported problem.

This represents a massive increase in the amount of data utilities are processing and analyzing – a large utility will be processing billions of pieces of data annually.

This is a huge challenge at the hardware level – putting connectivity at the many key points of a utility network, and installing a data processing solution fast and robust enough to process its inputs. At the software level value is driven by analyzing and refining data into actionable knowledge – another significant task.

The benefits, however, are considerable – and will be increasingly necessary. Most obviously, regular and on-demand information from the operational network will identify problems more quickly and exactly – to the point where a utility provider can determine exactly which customers are affected by a service outage and communicate directly with them.

And, when the problem has been resolved, the same deep data set can be used for retrospective analysis, to discover what went wrong, where and when by checking moment-to-moment data. This in turn can be used to anticipate issues in future and, by integrating with IT systems like talent management and procurement, establish the most effective and cost-effective way to prevent issues before they occur.

Then, beyond retrospective and preventative analysis, these data sources create the possibility of optimization – not only averting crises, but applying information from the network to improve performance.

We are already seeing the most successful utility companies pulling ahead through this kind of exacting analysis: in our benchmarking, the top 25% of utilities providers had pushed downtime to 0.1% - 4.4% lower than the worst example. Return on assets was 9.9% against 7.5% - and annual maintenance costs 5% lower. These represent significant savings and service improvements.

Whether the answer is to create a new role, or to change the responsibilities and reporting structure of the CIO – another approach I am seeing –successful utilities are, and will, keep moving their IT and OT systems and resources together.

Read also my latest blog on IT/OT integration >>Utilities are moving to the intelligent level of Transmission and Distribution and have a look at the summary of blogs, videos and partner information on IT/OT integration >>Key Topic: IT/OT Integration.

To find out more about how we are helping utilities with their convergence projects, and the benefits they are experiencing, take a look at the SAP Solution Explorer for Utilities, and check the SAP4Utilities Twitter feed.